Russian AmEx service disrupted
The two companies are now in dispute over the use of payment terminals.
In the eight years of its existence Russian Standard Bank has mushroomed into the top private consumer lender in Russia, through an extremely aggressive policy of lower-margin, high-volume expansion.
In June it grabbed the contract to process American Express transactions nationwide from market leader United Card Service.
Now UCS has hit back by refusing to accept Amex in its 21,000 shop, restaurant and hotel terminals across the country.
UCS defends cutting off Amex's 40,000 Russian customers by claiming a blatant conflict of interest, as Amex handler Russian Standard can charge UCS one commission and as a terminal provider offer themselves a lower rate.
“Once they can offer Amex cards at a lower rate than we are allowed by the contract between us to offer the same merchant it would mean that they have from our point of view unfair competitive advantage to us,” pointed out Vladimir Komlev, CEO of United Card Service.
Russian Standard refused to be interviewed by Russia Today but claimed in a statement it had the funds and ability to persuade merchants to install a completely new set of parallel Amex terminals.
“Russian Standard Bank has been working aggressively to replace UCS terminals. However American Express Cardholders may experience a disruption in service at some merchants who had used UCS terminals to process American Express transactions,” described the situation Preston Mendenhall, Communications Director of Russian Standard Bank.
Analysts say the behaviour of both sides shows even top Russian companies do not understand the long-term implications of poor customer treatment.
“Given that the relationship between Amex card company, Russian Standard Bank and UCS have been going on for a considerable period of time. It appears to me to be inappropriate for UCS to take this public at this time. It indicates that UCS is using the problems of Russian Standard has in other segments of the market as pressure for its own particular dispute,” commented Richard Hainsworth, CEO of RusRating Agency.
Russian Standard is now suing RusRating for claims in a separate interview that clients who tried their services do not come back.